Co-packing Agreement

CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.





CO-PACKING AGREEMENT







THIS AGREEMENT, executed as of April 30, ad 2002, is between NEW WORLD PASTA COMPANY, a company incorporated in Delaware, with an address at 85 Shannon Road, Harrisburg, PA 17112 ("New World Pasta") and DAKOTA GROWERS PASTA CO. , a company incorporated in North Dakota, with an address of One Pasta Avenue, P. O. Box 21, Carrington, ND 58421-0021 ("Co-packer").



WHEREAS, Co-Packer is a manufacturer of dried pasta products, and is capable of and willing to produce, package and deliver certain dried pasta products to New World Pasta; and



WHEREAS, New World Pasta desires to have Co-packer produce, package and deliver certain dried pasta products to New World Pasta;



NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and for other valuable consideration, the parties agree as follows:







ARTICLE 1

DEFINITIONS





1.1 Definitions.



Unless the context otherwise requires, the following words and phrases have the meanings set forth below:



AFFILIATE means, with regard to any party or person, any person, corporation or other entity who or which directly or indirectly controls or is controlled by, or is under direct or indirect control with, such party or person, and for such purpose, "controlling" means possessing, directly or indirectly, the power to direct or cause the direction of the management and affairs of such party or person, whether through ownership of voting shares, contract or otherwise.



AGREEMENT means this co-packing agreement, and any exhibit or schedule attached hereto or referred to herein, and all documents that amend this Agreement.



APPLICABLE LAWS mean all federal, state or local laws, regulations, rules or requirements applicable to the manufacture and supply of the Products to New World Pasta in effect at any time during the Term of this Agreement.



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BUSINESS DAY means any day except Saturday, Sunday and a national holiday in the United States or Canada.



CASE means a case containing specified number of cartons of Products described in Schedule "A".



CONFIDENTIAL INFORMATION has the meaning in Section 11.1(1).



(CONFIDENTIAL TREATMENT REQUESTED)



DESIGNATED OFFICERS has the meaning set forth in Section 12.1(2).



DISPUTES has the meaning set forth in Subsection 12.1(1).



EFFECTIVE DATE means (CONFIDENTIAL TREATMENT REQUESTED)



FACILITY means the Co-Packer92s Carrington, North Dakota and New Hope, Minnesota plants.



FORCE MAJEURE EVENT has the meaning set forth in Subsection 13.9.



INITIAL MEDIATION PERIOD has the meaning set forth in Subsection 12.1(2).



NON-CONFORMING PRODUCT means Product that is unacceptable to New World Pasta because of Co-packer92s deviation from the Specifications or an error by Co-packer in the manufacturing or packaging process.



OPERATING EQUIPMENT means all equipment, supplies and materials of every nature and kind as may from time to time be required or used in the production of the Products.



PACKAGING SPECIFICATIONS has the meaning set forth in Subsection 2.3.



PRICE SCHEDULE has the meaning set forth in Subsection 3.l.



PRODUCTS mean the dried pasta products identified on the attached Schedule "A".



PRODUCT SPECIFICATIONS has the meaning set forth in Subsection 2.3.



SPECIFICATIONS mean the Product Specifications and the Packaging Specifications, as defined in this Agreement.



TERM has the meaning set forth in Section 10.1.







1.2 Paragraphs and Headings.



The division of this Agreement into paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of the Agreement.



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ARTICLE 2

MANUFACTURE AND SUPPLY





2.1 Manufacture and Supply of Products. (CONFIDENTIAL TREATMENT REQUESTED)





2.2 Production Facility. (CONFIDENTIAL TREATMENT REQUESTED)





2.3 Production (CONFIDENTIAL TREATMENT REQUESTED)







ARTICLE 3

PRICES OF PRODUCT





3.1 Prices. (CONFIDENTIAL TREATMENT REQUESTED)







ARTICLE 4

PURCHASE PROCEDURES AND TERMS





4.1 Forecast and Orders. (CONFIDENTIAL TREATMENT REQUESTED)





4.2 Payment Terms.



Payment terms shall be net thirty (30) days from date of invoice.





4.3 Products Acceptability.



(1) Co-packer recognizes that it is fundamental to the success of the marketing, distribution and sale of Products that New World Pasta obtain good quality Products from Co-packer. Accordingly, Co-packer warrants to New World Pasta that the Products will be free from any defects of whatsoever kind in manufacture, ingredients and packaging, and will conform in every respect to the Specifications.



(2) The provisions of this section shall not be deemed to diminish, restrict or exclude the operation of any warranty implied or imposed by law or otherwise, nor any other rights and remedies provided by law for breach of warranty and breach of contract.







4.4 Recall Procedure. (CONFIDENTIAL TREATMENT REQUESTED)





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ARTICLE 5

ADDITIONAL OBLIGATIONS OF CO-PACKER





5.1 Conflicting Agreements.



Co-packer covenants and represents that it has not, nor will it enter into any, agreements or arrangements with, or incur obligations to any third party that would interfere or conflict with any of the provisions of this Agreement in any manner whatsoever.





5.2 Information Requests.



Co-packer shall promptly furnish to New World Pasta in writing all information and/or reports reasonably requested by New World Pasta in writing, relating to the Products and performance of Co-packer92s obligations hereunder.





5.3 Trademarks.



(1) Co-packer shall not, for any reason during the Term of this Agreement, except as authorized in writing by New World Pasta, alter, deface or remove any trade-marks, patent numbers, notices, information or legends on Products.



(2) Co-packer hereby acknowledges the validity of New World Pasta92s title to all trademarks, trade names and logos and designs (whether or not registered) owned, licensed or claimed by New World Pasta and used in connection with the packaging, labeling or marketing of Products. Co-packer covenants and agrees that it will not at any time directly or indirectly contest the validity of the title to the aforesaid intellectual property by New World Pasta.









ARTICLE 6

OVERSIGHT AND INSPECTIONS





6.1 Quality Control and Reports.



Co-packer shall establish and maintain a rigorous quality control program acceptable to New World Pasta covering all Products sold to New World Pasta. Co-packer shall provide to New World Pasta any and all quality control reports and such other reports as New World Pasta may reasonably request in writing from time to time.





6.2 Inspections.



Co-packer shall at all times during normal business hours permit New World Pasta92s personnel and other New World Pasta designated representatives to have reasonable access to those portions of the Facility where Products are manufactured, the Products, and all locations where the Products are stored for the purpose of ensuring Co-packer is complying with its obligations hereunder.





6.3 Regulatory Matters.



Co-packer shall obtain all regulatory and/or governmental permits necessary to manufacture and sell the Products hereunder. Co-packer shall bear the responsibility for filing any reports relating to the Products required by applicable government authorities.



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ARTICLE 7

PROCESS IMPROVEMENTS



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